"Deal of the Year" / Marine Money Award for HSH Nordbank subsidiary
Latin America’s largest shipping line successfully restructured Shipping company owners subscribe to the sector’s first ever debt-to- equity swap Restructuring programme amounting to USD 770 million Proof of collaboration in the shipping community
Hamburg / Kiel / New York, June 27, 2010 - The highly regarded Deal of the Year award in the Restructuring category was recently bestowed on a HSH Nordbank subsidiary at the Marine Money Conference in New York.
The award to HSH Corporate Finance relates to its plan for the rescue of the Chilean shipping line CSAV (Compañia Sudamericana de Vapores).
CSAV was hit hard last year by the financial crisis and the ensuing crisis in the global shipping market; there was the threat of insolvency. As is usual for container shipping lines, CSAV has a fleet of ships that belong to third parties; in this case primarily German ship owners. For these ships the shipping line pays a charter to the owner. This charter is funded by the income of the shipping line, which manages the fleet and negotiates with customers the freight rates for transporting goods.
Due to the crisis, the income of CSAV, which with more than one hundred ships is Latin America’s largest shipping line and number 15 worldwide, has at times been insufficient to fulfil current obligations to ship owners and the banks providing project finance.
HSH Corporate Finance, a wholly-owned subsidiary of HSH Nordbank, obtained the mandate to execute a proven form of restructuring, but one that is to date unique in this sector: a debt-to-equity swap. This involves the creditors exchanging their receivables for equity in the borrower. “During the negotiations over the terms and conditions, all those involved were afflicted by occasional bellyaches. But after a few weeks a way was found among more than 70 participating parties on which all could agree,” said Dr. Dirk Lammerskötter, Senior Vice President and Head of Shipping at HSH Corporate Finance, who was in charge of the transaction. Lammerskötter added that he encountered a “high degree of solidarity and understanding among all those involved” during the negotiations.
Flanking the debt-to-equity swap were further capital measures taken by the existing shareholders as well as gaining new investors. The restructuring programme devised by HSH Corporate Finance comprises a total volume of USD 770 million. Now, about eighteen months later, CSAV is once again in a significantly better commercial position and the price of the Company's share, which is listed in the Chilean IPSA key index, has risen by 85%. “Investors are thereby showing growing confidence in the group’s future and the debt-to-equity swap is paying off for all parties,” Lammerskötter says.
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